Apple and the Coming War Over Patent Trolling

It’s becoming ever more obvious that the U.S. patent system has spiraled completely out of control. For the latest evidence, look no further than the strange case of the lawyer who betrayed Apple.

Ars Technica tells [1] the fascinating story of John McAleese, an attorney with the prestigious Morgan, Lewis & Bockius law firm, which has been helping Apple with patents since 2003. His wife, Jennifer McAleese, co-founded a company called FlatWorld in 2006 with Slavko Milekic, a design professor lacking any programming experience, with the intention of producing touchscreen technology. Although FlatWorld initially planned on marketing its own products, the founders considered patent litigation as a “Plan B” from the beginning.

FlatWorld has sold touchscreens to only two clients: three to the Philadelphia Flower Show in 2008 and one to the Philadelphia Zoo in 2009. Out of the three sold to the Philadelphia Flower Show, two have reportedly broken down. With no real product, the company instead went with its backup plan.

After Apple introduced the iPhone in 2007, the McAleeses helped Milekic file a follow-up patent application that, according to Jennifer McAleese, was intended to make it sound more like the iPhone. Later, with input from her husband, Jennifer McAleese began contacting Apple competitors, such as Google and Nokia, to see if they might be interested in licensing or acquiring the patent to use against Apple. Nothing came of those negotiations, so FlatWorld changed gears and filed a patent infringement lawsuit against Apple directly in 2012. Once the involvement of John McAleese became clear earlier this year, Apple went on the offensive, arguing that McAleese’s connection to Morgan Lewis should halt the FlatWorld case, at least until
FlatWorld gets new lawyers. John McAleese has since been dismissed by Morgan, Lewis & Bockius.

But that’s just the very strange tip of the iceberg of problems with the U.S. patent system. This American Life [2] has released an update to its 2011 patent troll story, this time focusing on Personal Audio’s legal pursuit of podcasters (see “Help the EFF Save Podcasting [3],” 31 May 2013) and the patent troll firm Intellectual Ventures. If this issue fascinates — or infuriates — you, be sure to give it a listen. For me, the most troubling aspect of the episode was that Personal Audio’s patent is for magazines on audio cassette, which, while a roughly similar concept, relies on a
completely different technology from podcasting.

While patents were written into the U.S. Constitution to protect innovation, if anything, the patent system now works against innovation, thanks to patents on obvious ideas, overly broad patents, and companies that seek to profit from the work of others after the fact while producing nothing on their own. In fact, a working paper by the Federal Reserve Bank of St. Louis suggests abolishing patents entirely [4], pointing out that patent legislation is often most supported by stagnant businesses that are out of fresh ideas. Writer, engineer, and podcaster John Siracusa has voiced
similar thoughts on his now-defunct podcast Hypercritical, and Jeff Bezos, founder and CEO of Amazon, has often publicly lamented the state of the patent system [6].

The patent system won’t be dismantled anytime soon, but there is new hope on the horizon. On 4 June 2013, President Obama released a barrage of executive orders and legislative proposals [7] aimed at reforming the patent system. While it’s uncertain whether the White House can get much of anything passed in the current legislative climate, many tech companies agree that patent reform is necessary and can pressure Congress to bring clarity to the current mess.